Kuwaiti govt warned against growing public spending

April 22, 2014 10:13 am

The governor of Kuwait’s central bank has said rising public spending and dependence on oil revenues are preventing sustainable economic development, echoing warnings from the International Monetary Fund (IMF), Reuters has reported. Mohammad al-Hashel, who rarely comments on policy issues, said Kuwait needed to reduce wasteful spending in the state budget and “rationalise” subsidy programmes. Hashel’s predecessor, Sheikh Salem Abdulaziz Al-Sabah, who is also a former finance minister, resigned as central bank chief in February 2012, after 25 years in protest against the state’s wasteful spending. The IMF said the major oil producer’s spending could exceed revenues as early as 2017 under a worst-case scenario, while the Kuwaiti government predicts this could happen by around 2021.